World Bank data shows Pakistan’s external debt has surged from $68.67 billion in 2015 to $135.1 billion in 2025, raising concerns over repayment pressures and dependence on foreign lenders.
Highlights
- Pakistan’s external debt increased nearly 97% over the past decade.
- Total foreign debt reached $135.1 billion in 2025, up from $68.67 billion in 2015.
- China emerged as Pakistan’s largest individual foreign creditor.
- Public and publicly guaranteed external debt stood at $107.07 billion.
- Private non-guaranteed debt reached $17.58 billion, while short-term debt totalled $10.45 billion.
- Rising borrowing costs and shorter repayment periods continue to strain Pakistan’s finances.
Pakistan’s Foreign Debt Nearly Doubles in a Decade, China Becomes Largest Creditor
Pakistan’s financial challenges have intensified as the country’s external debt nearly doubled over the past decade, reaching $135.1 billion in 2025. According to figures cited from the World Bank’s International Debt Report 2026, the sharp increase highlights Pakistan’s growing dependence on foreign borrowing and mounting pressure on its economy.
Pakistan’s total external debt stood at $68.67 billion in 2015. By 2025, it had climbed to $135.1 billion, representing an increase of approximately 97% over ten years. The latest debt figure was also 4% higher than the previous year, reflecting continued reliance on external financing.
China Emerges as Pakistan’s Biggest Lender
China has emerged as Pakistan’s largest individual creditor, underlining Beijing’s significant role in the country’s external financing. Pakistan has maintained close economic ties with China, particularly through infrastructure development and investment initiatives.
However, growing dependence on foreign lenders has raised concerns about Pakistan’s ability to manage its repayment obligations, especially amid persistent economic pressures and limited financial flexibility.
Public Debt Accounts for Largest Share
According to the reported World Bank figures, public and publicly guaranteed external debt accounted for $107.07 billion of Pakistan’s total foreign debt.
Private non-guaranteed external debt stood at $17.58 billion, while short-term borrowing amounted to $10.45 billion. Together, these categories made up the country’s total external debt of $135.1 billion.
The substantial share of government-backed borrowing highlights the financial obligations facing Pakistan’s public sector.
Higher Borrowing Costs Add to Financial Pressure
Pakistan continues to face challenges associated with expensive private borrowing and shorter repayment periods. These factors can increase refinancing risks and create additional pressure on the country’s foreign exchange reserves.
Short-term debt is particularly sensitive to refinancing conditions because borrowers must repay or renew obligations within a relatively limited period.
Economic Stability Remains a Key Challenge
The sharp rise in external debt underscores Pakistan’s need to strengthen export earnings, attract sustainable foreign investment and improve domestic revenue generation.
Managing debt repayments while maintaining essential imports and supporting economic growth will remain important priorities for policymakers.
With foreign debt approaching twice its level a decade ago, Pakistan faces the challenge of reducing its dependence on external borrowing while ensuring long-term financial stability.
